Albania Passes 2012 Budget Banking on Growth

Prime Minister Sali Berisha | Photo courtesy of World Economic Forum

The government's projected growth forecast of 4.3 per cent for 2012 is far more optimistic than an IMF estimate of 1.5 per cent or the World Bank’s forecast of 2 per cent.

Both institutions are warning that Albania’s economy will be affected negatively by the euro-zone debt crisis.

Italy and Greece, the two EU countries that are at the centre of the single currency's economic problems, are also Albania’s main trading partners.

The government projects that revenues in 2012 will be 355.8 billion lek (€2.544 billion), while expenditure for 2012 will be around 397 billion lek (€2.83 billion).

The budget passed with the backing of the ruling coalition of Prime Minister Sali Berisha, while the Socialist-led opposition voted against.

Berisha said his government planned to raise wages and pension, brushing off opposition concern about the levels of debt that Albania continues to accumulate.

Albania’s debt currently stands 59.4 per cent of the country’s gross domestic product, which is relatively low by the standards of debt-laden countries in Western Europe but high by the standards of the region.

Italy's sovereign debt ration is around 120 per cent of GDP, for example, Belgium's is almost 11 per cent while Britain's is around 75 per cent. On the other hand, most Balkan countries are relatively unindebted, at around 40 per cent, with the glaring exception of Greece.